Addressing Conservation In a Farm Lease
June 10, 2015
Conservation practices can be addressed in a written farm lease.
Whether you’re a farmer or a landowner, addressing conservation and sustainability in a farm lease can be a tricky subject. Tenants and landlords sometimes choose to ignore issues that they believe may create conflicts in the landlord-tenant relationship. This is particularly true with farm leases, which are often between neighbors, family members, and long-time friends. However, both parties do have an interest in ensuring the sustainability of the land, and discussing and including conservation provisions in a farm lease can be beneficial for both parties and the land.
This post is intended to provide an introduction to some key factors to consider when addressing conservation concerns, or sustainability, in a farm lease arrangement. Further information is available through the Drake Agricultural Law Center, and the non-profit, Women, Food and Agriculture Network (WFAN) has a “Women Caring for the Land” program dedicated to assisting women landowners with conservation efforts.
Understanding Farm Leases and Conservation
Before discussing how you can put conservation provisions in your farm lease its a good idea to have a basic understanding of farm lease contracts and conservation practices and improvements. Again, the resources listed above provide further information on these topics.
Conservation Priorities
Conservation concerns can be limited to on-farm issues, such as preventing erosion and ensuring soil nutrition. Many farmers and landowners also have a conservation ethic relating to issues that extend beyond the farm gate, such as improving water quality or enhancing wildlife habitat. Its a good idea to speak with county USDA Natural Resources Conservation Service (NRCS) personnel for information about conservation ideas on your farmland. This may help identify your own personal conservation priorities and gain an understanding of what is necessary to address those conservation goals to ensure the sustainability of your farm and minimize negative environmental effects.
One of the most important aspects to understand about conservation practices in a farm lease arrangement is that some conservation efforts provide short-term benefits and others provide long-term benefits. This distinction is significant as it should be taken into consideration when determining how long the lease will be for and who will pay the costs of such conservation practices and improvements.
Farm Lease Basics
Farm leases are contracts. As a contract, the lease must have certain provisions to be enforceable. This includes:
Identification of the parties (the tenant and the landlord).
The amount of rent paid.
The property leased to the tenant.
The duration or term of the lease.
There are many other provisions that can have a substantial impact on the rights, duties, and liability of each party, which should be considered, and preferably, addressed by a licensed attorney.
Its important to point out that farm leases do not have to be written to be enforceable. However, written leases are helpful for establishing the rights and obligations of each party and avoiding misunderstandings and conflicts in the future. This can save time, money, and hurt feelings. It should also be noted that an oral lease is only enforceable as a year to year lease. To have an enforceable farm lease for more than one year it must be in writing.
States also have laws that specifically address farm lease issues as well as soil conservation and water quality. Both Iowa and Missouri have such laws. These laws do need to be considered when developing a written farm lease.
Communication Between Farmer and Landowner
This can be the most difficult hurdle to overcome in addressing conservation in a farm lease. Both farm tenant and landlords can be reluctant to initiate a conversation about conservation. These are a few pointers that can get the discussion started.
Understand the other parties perspective.
Convey that you understand the financial, time, or other constraints of the other party.
Approach negotiations in good faith, realizing that conservation may cost both parties.
Start the conversation by asking how you can help conserve farm resources.
Ultimately, the landowner is in control of the long-term decisions for farmland. It is the landowner that chooses the tenant and can place restrictions, as well as incentives, within the lease contract. While the landowner does have the final say, the farmer often has the knowledge and skill to implement conservation practices that are agreed upon by both parties.
Farm Lease Conservation Provisions
Landlords and tenants can agree to just about any terms they wish in a farm lease arrangement, provided its for a legal purpose. This means there are an unlimited number of provisions addressing conservation and sustainability that can be incorporated into a farm lease. The terms governing conservation on a rented farm should be developed from the conservation concerns and priorities of the landowner and farmer and should be written or reviewed by a licensed attorney.
Landowners and tenants can address issues including, but not limited to:
cover crops, including timing, cost, and destruction of the plants,
maintenance of existing conservation improvements, such as terraces, grass waterways, and buffer strips,
requirements for controlling erosion, such as contour farming,
tillage practices, whether conservation tillage or no-till,
amount and timing of application of fertilizer and other nutrients,
crop rotations,
livestock access to water sources, particularly stream banks and ponds.
These are just a few examples of conservation issues that can be a addressed in a farm lease contract. Again, the provisions that will work for your farmland will depend on your own priorities, whether that is soil retention and nutrition, water quality, or wildlife habitat.
Its also important to realize that there are ways that landowners can incentivize farm tenants to ensure conservation and sustainability. Such incentives may include:
Providing longer lease terms of 3, 5, or even 10 years (this is particularly important for long term conservation practices and organic production).
Ensuring the tenant is reimbursed for unused portions of conservation improvements if the lease is terminated.
Cost-sharing of conservation improvements and practices, whether its paying a portion of the actual cost or reducing rent for certain conservation practices.
Risk-sharing encourages a farmer to adopt practices that can reduce yield but improves conservation.
Provisions that improve communication may be the best incentive to ensure conservation. Landowners and tenants who communicate have more confidence in their tenure on a farm and are more apt to bring up conservation concerns.
A Conservation Lease Must Be Sustainable
Perhaps the most important aspect of a lease that helps ensure conservation is that it works for both parties. To be sustainable it must address each parties conservation concerns, but it also must ensure a profitable arrangement for both parties. This often means it needs to be tailored to the often unique needs of each party and to the land itself.
I’m often asked if there is a sample conservation farm lease or a template. There are form leases available from Extension offices, online legal forms marketers, and others, but such lease forms should be seen as a place from which to start. There is no one way to farm that promotes conservation and there is no one lease that will address all of the conservation needs in a farm lease arrangement. It will take prioritizing your concerns, discussing them with the other party, and working with an adviser to formulate the best plan for your farm land.